Like with everything there are reasons. Understanding why businesses don’t sell can help you to know how to adapt yours to increase the chances.
Three top reasons why businesses don’t sell are:
1) Unrealistic expectations of the real value of the business: Business owners have worked hard to build their businesses and, after all that hard work, it must be worth a lot. Ensuring ‘worth a lot’ in this statement is the challenge an owner faces. Hard work does not always equate to a value. Smart work can equate to increased value. Starting this increase in value should begin now, not just before one wants to sell.
Priscilla’s take: A short amount of smart work can dramatically change value and improve work life.
2) The business is not operating the best it can be: Often the owner wants to sell when they are burned out. It is best to sell when the business is doing the very best it ever has. Investment to being ‘best’ does not necessarily equate to spending lots of money. It can mean saving on so many things–buying smarter, hiring fewer but better, investing in knowledge that helps you look in rather than merely operating. Sometimes, a minimal investment in a set of expert outside eyes can result in best practices and increased value.
Priscilla’s take: Seeking proper outside counsel can dramatically improve what we do.
3) The business is not 21st Century and therefore will ultimately fail: A most prevalent example of this is the failure of some print publishers to recognize or wisely capitalize on the impact of the Internet. Sometimes we have to turn ourselves inside out to recreate or enhance what we do to keep up. Being lulled into complacency can be the largest of entrepreneur’s downfalls.
Priscilla’s take: If we are not growing, changing, we are dying.
What immediate steps can each entrepreneur take to ensure their business is ready to sell?